Which of the Following Statements Is CORRECT

question 38

Multiple Choice

Which of the following statements is CORRECT?

• A) If a firm has high current and quick ratios,then it must be managing its liquidity position well.
• B) If a firm sold some inventory for cash and left the funds in its bank account,then its current ratio would probably not change much,but its quick ratio would decline.
• C) If a firm sold some inventory on credit,then its current ratio would probably not change much,but its quick ratio would decline.
• D) If a firm sold some inventory on credit as opposed to cash,then there is no reason to think that either its current or quick ratio would change.
• E) The inventory turnover ratio and days sales outstanding (DSO)are two ratios that are used to assess how effectively a firm is managing its current assets.

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Definitions:

Customer Service Department

A division of a business that handles queries, supports customers with problems or complaints, and provides information about products or services.

Customer Cost Analysis

A process of determining the total cost incurred by a business to serve a customer, including all direct and indirect expenses.

Time-Driven Activity-Based Costing

An approach to activity-based costing that assigns resource costs directly to products or services based on the estimated time required for each activity.

Customer Service Department

A division within a company that handles inquiries, complaints, and support requests from customers.